Wow! Peter Grandich has an unprecedented history of calling market bottoms and tops. So when he takes his bold position, I listen - and encourage all to at least do the same.
U.S. Stock Market (DJIA 11,189) – I’ve been targeting the 11,300 area on the DJIA and Election Day in the U.S. as a point in time when the “steroid-craze” rally meets horrific economic, political and social fundamentals and no amount of “QE” easing can provide enough legs to take this rise much further. My Yellow alert is now turning Red. The time has come to put the bear suit back on and suggest bearish strategies. Bearish call spreads on major indices and liquidation of most non-metals related equities now appear appropriate in this person’s eyes.
As you know, I’ve not had an official bearish stance against the U.S. stock market since March 2009 and have expected the “Don’t Worry, Be Happy” crowd to once again lead the sheep to slaughter. Bullish sentiment has returned with a bang thanks to the Pied Pipers who fill the airwaves on Tout-TV and elsewhere. This comes at a time when corporate insiders have dramatically increased their selling. Despite what many in the financial arena would like you to believe, the stock market is a place where you get to be a part owner of companies. Who knows more about what’s happening at a company than the key personnel who run the company? If they’re selling shares aggressively while the public is buying, who do think has an edge? If you don’t believe it’s the insiders, I have a bridge and some Texas Rangers World Series Champions memorabilia for sale – cheap!
I’ve often stated I’m not interested in the day-to-day movements in markets as the cemetery is filled with people who tried beating markets trading. My outlook is for the long-term and as you know I’ve stated our market and economy is likely to mirror what happened in Japan from 1989 until now. QE flamed out in Japan and it shall here as well. Borrowing and spending our way out of this mess is not the answer nor is it the first time America has tried it and failed.
We’re also not going to solve our problems simply because one party gets back into a majority because the enormous problems America faces is a sum total of both parties mishandling of things. Yes, politicians are part of the problem, but remember I believe the real culprits are Americans themselves. Having too much stuff got us here and until they’re closing public storage facilities versus opening them, we’ll never get to the root of the matter.
A beautiful Canadian sang a song a few years back that accurately described Americans then and now.
About me: I give Economic, Social and Global trend briefings from some of the world's brightest minds at my blog http://saveriomanzo.com/ and http://saveriomanzo.blogspot.com/. I also provide true and tested financial planning and wealth advice. Most recently, over the past few years, I have become socially conscious and have been attempting to practise ways in which I can live my life more environmentally friendly. Along with some truly exceptional friends, we provide consulting and business development for small-medium sized businesses. In addition, I truly believe in being philanthropic, giving and doing unto other as we would have them do unto us. Some of my fondest resources are from Barry Ritholtz of The Big Picture, David Rosenberg and what Warren Buffett of Berkshire Hathaway is up to behind the scenes, as an example.
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